The next time you're looking for new flooring, think of Dalton, Georgia. Almost 90% of the world's carpet is said to be produced within a 25-mile radius of this US city. So important is the industry to the area that its police force's badge even carries three rolls of carpet as its civic symbol. Apt, perhaps, as there have long been claims by campaigners that carpet is guilty of more than a few environmental misdemeanours when it comes to the impact of its manufacturing process, as well as its impact on indoor air quality.

Unsurprisingly, the carpet industry hasn't taken these claims lying down and continues to robustly defend its reputation. But the unedifying spat between these camps has only acted to leave most consumers still largely confused about any negative impacts.

The issue of indoor air quality tends to worry people most - first, whether a carpet is guilty of "off-gassing" and, second, whether carpet increases or decreases the risk of asthma or allergen attacks. Many people, as with the interior of new cars, actually say they like the smell of newly laid carpet. But this smell is largely attributable to off-gassing VOC (volatile organic compound) emissions, caused by the adhesives, which tend to rapidly disperse a few days after fitting. The health impact of exposure to VOCs is still debated but has, for example, been linked to "sick building syndrome" which, ironically, first came to public prominence in 1988 when the fitting of new carpets at the US Environmental Protection Agency's head office in Washington DC was cited as a cause of increased worker illness. The only advice, it seems, is to source "low-VOC" carpet (increasingly easier to find) and - as is the practice with most homes - to demand the use of tacks to fit the carpet as opposed to glue.

Where the debate is most fierce, however, is with the ever-emotive issue of asthma. Back in the late 1990s, carpet was selling less due to the fashion for hard-flooring. Some opportunist hard-flooring firms - subsequently slapped down by the advertising authorities - made claims that their products were better suited to asthma sufferers. The carpet industry complained and has since repeatedly said there is no evidence to link carpet to increased risk of asthma attacks, even claiming that carpet can reduce risk. However, groups such as Asthma UK disagree and still recommend removing carpets from the home, alongside other measures such as removing soft toys from beds and using barrier-bed systems, as a way of reducing exposure to microscopic mite droppings that collect in carpets and soft furnishings and are a known trigger for attacks.

The Pesticide Action Network (PAN) also claims that carpets absorb pesticides residues brought in on shoes from outside. More worrying, it says, is that carpets, particularly wool ones, are routinely treated with pesticides to prevent moth and carpet beetle infestations and mildew. The US EPA states that 80% of most people's exposure to pesticides now occurs indoors. Furthermore, children can ingest up to 100 milligrams of house dust a day - five times more than adults - because they play and crawl on carpets. This is why PAN recommends placing mats by outside doors for wiping feet and regular vacuuming, particularly along skirting boards and under furniture.

An issue that resonates less with consumers is a carpet's embodied energy - the amount of energy it took to manufacture it. But the Carpet and Rug Institute, the industry's US trade association, states that it takes 10.3m BTUs to manufacture 1,000 square yards of carpet. This means the energy required to make enough carpet to fit a modest, two-bedroom home (about 100 square yards) is roughly equivalent to that contained within 80 gallons of petrol.

Then there's the water. Carpet manufacturing, like most textile processes which require an extensive dying stage, demands huge quantities. In 2003, the carpet industry in Dalton (at the time experiencing an extended period of drought) was consuming 37m gallons per day - 76% of the region's total water demand. The industry says that 8.9 gallons of water are required to make just one square yard of carpet. The local impact of this waste water also causes concern for environmentalists - as does the huge amount of carpet waste sent to landfill or incinerated.

Overall, compared to other floorings, carpet scores poorly on overall environmental impact. An environmental lifecycle assessment by the University of Utrecht found that natural linoleum has the lowest impact, followed by wool carpet, then sheet vinyl, and finally nylon carpet. The carpet industry's riposte is that carpet is an excellent insulator and can save 15% on home heating bills. But with an average life of eight years, this benefit must be weighed up against its embodied energy.

If choosing a new carpet, look for natural fibres such as wool, hemp, corn stalks, cotton, sea grass, jute, sisal, or coir, all of which are increasingly being offered by retailers - but always ask about what treatments it has been exposed to. Large rugs, as opposed to wall-to-wall carpets, also act to reduce VOC exposure during fitting as well as allowing for easier cleaning. There is now even carpet made from recycled material such as old office carpet tiles - but they may require clearance from the style police as well as the environmental police.